Novus Blog

Novus partners with Tpas and Home Group to tackle social housing stigma

We’ve recently teamed up with Tpas and Home Group to support their Life Swap sessions in Leeds, as part of our ongoing commitment to equality and diversity.

The workshops are designed to break down the barriers some people experience when living in social housing, by allowing them to share their stories and experiences with individuals from different backgrounds.

Many social landlords are focused on tackling stigma following the release of the Government’s social housing green paper (A New Deal for Social Housing) which highlighted the issue. The green paper is available on the Government website here.

As part of the sessions, which we sponsored and took part in, housing associations will learn to better understand the different needs of individuals within their communities, develop a cohesive approach to helping vulnerable residents and tackle the stigma attached to certain groups as a result.

We’ve long been committed to the principle of giving back to our communities, whether through holding resident workshops, helping vulnerable tenants out in their day-to-day lives or through our recent Novus Big Five initiative, which saw us give five worthy causes a £20,000 refurbishment project. You can check out one of our recent refurbishment projects here.

Kevin Rhone, head of social value and customer services at Novus, said: “When the opportunity came along to sponsor the Life Swap initiative, we couldn’t wait to get started.

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BEING STRICTER ON BAD PAYERS

Neil Washington, Finance Director at contractor Novus Property Solutions, explains how clients and the industry should work harder to enforce better payment practices to strengthen the SME supply chain
The obligation on firms to disclose their payment terms came into effect in 2017 but judging by the headlines so far in 2019, many industries are still struggling to meet best practice. The construction industry is not alone, yet the subject of late payments in the sector has very specific ramifications for its long-term health.
You can see how the industry got itself into this state. Many of the largest listed contractors operate on extremely tight margins and must satisfy investors in the City. Paying subcontractors promptly can often fall down the list of priorities, either deliberately or not.
At Novus we’ve strived to reduce our payment terms because of the issues late payment causes. We now take only 26 days to pay subcontractors on average and this puts us in the top five quickest among the industry’s largest 100 contractors ranked by Construction News, where the average time to pay is 43 days. We don’t have any different accounting methods or invoicing systems, it’s purely in our culture to pay our subcontractors on time. We’re a family-owned business and that plays a part in cultivating values like this.
But the construction industry is a varied beast and each contractor has different internal pressures. In some cases, larger contractors will use cash which is due to be paid to their supply chain as working capital and without pressure from clients to change this, it could carry on for a long time. While late payments must now be recorded and published, more could be done to accelerate change.
The issues it causes
Main contractors and their supply chains have a symbiotic relationship. Paying on time and ensuring that subcontractors can maintain good cashflow means that they will be more likely to accept more work and do a good quality job.
It’s also rare that a subcontractor will only be working for just one bad payer at any given time. This can so drastically affect their cashflow that they risk going bust. The industry faces a huge skills shortage and access to labour, particularly specialist skills, is increasingly difficult. Often these skills come from smaller businesses. A weakened supply chain drives up costs and results in longer project timeframes for clients.
What can larger contractors and clients do?
While most clients stipulate good payment terms when appointing a major contractor, very few follow this up during projects. We’d advocate a review of payment practice statistics as part of the bidding process and spot checks on payments during contract periods to ensure contractors are making good on their promises.
It’s clear that public shaming may not be doing enough to push the industry and going against the curve like Novus has done can be difficult, particularly when your competitors aren’t doing much themselves. Direction from clients could initiate a huge change for the benefit of local businesses while reducing long-term construction costs.